Duty with Diligence : Evidence from Corporate Site Visits and Fund Performance

Institutional investors gain an information advantage from conducting private meetings with listing companies. Activities such as corporate site visits are informative for fund managers and stock analysts. We propose that mutual funds strategically conduct visits to their key holding firms and firms with which they have a connection. Even though the information disclosed during visits is public in nature, mutual fund managers are able to affirm their selection of outperforming stocks through this communication channel. In addition to managers’ efforts with regard to information acquisition, we attribute enhanced performance to fund managers’ due diligence at work